The High Price of Hunger

The world’s farmers need a pay raise, or else, come mid-century, the other 7 billion of us may not have enough to eat.

As the Earth Policy Institute notes, the world produced more grain than it consumed throughout the ’70s, ’80s, and ’90s. Today, those surpluses are gone. While the world harvested 20.4 million tons of grain between 2001 and 2010, it consumed 20.5 million tons. In October 2009 the United Nations’ Food and Agriculture Organization (FAO) reported that world food production would have to increase 70 percent by 2050 to adequately feed the planet’s growing population. In developing nations alone, this would require an investment of $83 billion a year. And, the organization noted, “farmers and prospective farmers will invest in agriculture only if their investments are profitable.”

In the 21st century, market power is concentrated in a very small number of food corporations and supermarkets that buy food worldwide. The food corporations minimize their input costs by paying farmers less for farm commodities. The power of the farmer to resist downward price pressure has weakened, as farmers in rich and poor countries alike now compete intensely with each other to sell at the lowest possible prices.

At the same time, the manufacturers of fuel, machinery, fertilizer, chemicals, seeds, and other necessities have grown much larger, more globalized, and more powerful. When farm commodity prices rise, the industrial firms increase the price of their wares. In 2008, when grain prices rose 80 percent, fertilizer prices went up as much as 160 percent, and oil was $160 a barrel.

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Farmers are trapped between muscular global food firms that drive down the prices of their produce and muscular industrial firms that drive up the cost of their inputs. Cheap food prices also reduce national and international investment in agriculture, as investors consider farming less profitable than other opportunities. Because of these investment disincentives, farmers cannot readily adopt more sustainable and productive techniques. As a result, world food output is increasing too slowly to meet rising demand, overall farm productivity gains are sliding, and yield gains for major crops are stagnating.

In a recent satellite survey, FAO researchers reported that 24 percent of Earth’s land surface was seriously degraded, compared with 15 percent estimated by an on-ground survey in 1990. The FAO team noted that degradation was proceeding at a rate of around 1 percent a year. This degradation is caused primarily by the low profitability of agriculture, which drives many farmers (particularly in poorer regions) to misuse their land.

Much the same applies to irrigation: “In order to double food production we need to double the water volume we use in agriculture, and there are serious doubts about where there is enough water available to do this,” says Colin Chartres, director general of the International Water Management Institute.

Solutions to land and water degradation are fairly well known and have been shown to work. Unfortunately, most farmers cannot afford to implement them, even though many would like to do so. And there’s little in the way of government assistance. In the United States, for example, public expenditures on agricultural research and development grew 3.6 percent a year from 1950 to 1970, but only 1.4 percent a year from 1970 to 2007. “A continuation of the recent trends in funding, policy, and markets is likely to have significant effects on the long-term productivity path for food staples in developed and developing countries alike,” write University of Minnesota economists Jason Beddow, Julian Alston, and Jason Philip Pardey.

While a few highly efficient and profitable producers continue to make advances, the bulk of the world’s farmers are being left behind—especially small farmers, who currently feed more than half the world.

Although most experts agree that we should be seeking ways to sustainably double food output over the next 50 years, the ruling economic signal for the farmer is: Don’t do it. If we simply obey the marketplace and allow agricultural output to gradually fall behind, however, 9 billion consumers will be exposed to unprecedented price spikes, which will imperil the poor and may well lead to government unrest and regional wars. Instead of taking this laissez faire approach, policy makers need to find ways to increase farmers’ incomes, which would provide incentives for investment, innovation, and production.

Here are a few ways to address the issue:

Consumers, supermarkets, and food processors could pay more for food to protect the resource base and enable farmers to invest in new technologies.

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Governments could pay farmers a social wage, separate from their commercial food production, for exercising proper stewardship of soil, water, atmosphere, and biodiversity.

Regulations could reduce the use of technologies that degrade the food resource base and reward those that improve it.

A resource tax could be imposed on food to reflect the true environmental cost of producing it; proceeds could be reinvested in researching and implementing more sustainable farming systems.

Markets could be established for key farm resources to offer farmers higher returns for wise and sustainable farming practices.

Public education programs could demonstrate how to eat more sustainably, and industry education programs could showcase sustainability standards and techniques.

None of this will be easy or work overnight, of course, but if we want long-term food security, it is imperative that a serious debate take place about how to deliver fairer incomes to farmers worldwide, countering the unintended effects of today’s overwhelming market forces.

Julian Cribb recently wrote The Coming Famine (University of California Press, 2010). Excerpted from The Futurist (May-June 2011), a bimonthly publication of the World Future Society, which investigates how social, economic, and technological developments are shaping the future. www.wfs.org